Contract dispute may lead production of Boeing to another state

On Behalf of Dunlap Fiore, LLC |

When media reports about contract disputes between well-known private employers and unions grab national headlines, most people tend to pay attention. Louisiana residents may have heard of the contract dispute between the aerospace giant Boeing and the machinists union.

In the on-going dispute, Boeing proposed cuts in healthcare and pension benefits, and has proposed that pension plans for new hires be changed to 401(k) retirement plans. In the new scheme, Boeing would contribute 10% for the first two years, 6% the third year and 4% thereafter, until the end of the union contract. However, this is the second time in many months that union members have rejected Boeing’s latest offer to the machinists union, which represents over 31,000 members. The union’s initial vote rejected the contract by a two to one margin.

If the contract negotiations fall through, Boeing has threatened to move its production line for its latest offering, officially dubbed the 777X, out of its current manufacturing facility in Washington State. This naturally has piqued the interest of competing sites. The 777X production line is estimated to create at least 10,000 jobs for whichever region the company chooses to build its newest plane. The creation of that many jobs would be a great boon to any regional economy.

Louisiana residents would be interested to know that Boeing has expressed its seriousness and commitment to moving the production line out of the Washington state area by requesting proposals from other states that are interested in hosting its 777X production facilities. In response, Boeing says it has so far received proposals from 22 states, many of which have submitted multiple sites.

Union contract disputes can get challenging and complex for all sides involved. When consensus is not reached, the economic repercussions of failed contract negotiations can be dire not only of the company but also for union members. Thus, having a law firm and attorney familiar and well-versed with contract disputes and negotiations by one’s side may be helpful.

Source: Los Angeles Times, “Machinists union local set to vote on Boeing contract,” Maria La Ganage, Jan. 2, 2014